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The bear hug that Steak N Shake gave a Fremont company just before Christmas has spawned a drama rife with heroes and villains, random plot twists, colorful expressions and an interesting vote in the Michigan House that may take place this week.

It began with a Dec. 21 letter from Sardar Biglari, chairman of The Steak N Shake Co., to the board of the Fremont Michigan InsuraCorp, the small, publicly held parent company of Fremont Insurance. The letter “hereby declares (Steak N Shake’s) willingness” to buy all the InsuraCorp stock it didn’t already have (it owned 9.9 percent) for $24.50 per share, half to be paid in cash and half in shares of Steak N Shake stock. That day, the Fremont stock had closed at $22.01.

Some people in Fremont feared Biglari would move the Fremont company operations — and jobs — out of state. Fremont Insurance is descended from an insurance organization that began serving farmers in Newaygo County in 1875.

On Dec. 23, InsuraCorp issued a press release, rejecting the “unsolicited proposal” from Steak N Shake, explaining that “this hostile takeover attempt is not in the best interest of Fremont, our shareholders, our policyholders or the Fremont community.”

It’s not clear if Biglari still has any interest in the company. A couple of months ago, Steak N Shake moved its corporate HQ from Indianapolis to San Antonio. In early April, the Steak N Shake name changed to Biglari Holdings.

Regardless, back in the winter, Sen. Gerald Van Woerkom, (R-Norton Shores), who represents the Fremont area, sponsored a new bill that would apply only to publicly held domestic property or casualty insurers in Michigan with 200 or fewer employees. An attempted takeover of such a company would require a vote of two-thirds of the shareholders, instead of a simple majority, if the proposed takeover isn’t supported by a majority of the company’s board of directors. The Senate approved the bill; last week the House Insurance Committee voted 11-2 in favor of the law, after adding an amendment that stipulates that it only applies to insurance companies that generate 100 percent of premiums from sales in Michigan.

Gordon Lewis, a partner at Warner Norcross since 1974, has had no involvement in the matter nor any personal knowledge of the events, but his perspective is interesting because he specializes in corporate and securities law, works in mergers and acquisitions and has been involved in hostile takeovers before — on both sides.

“I would not yet describe this situation as a hostile takeover attempt,” said Lewis. “All (Steak N Shake) did was issue a press release back in December.” They also sent a letter to the Fremont company in which they declared “willingness” to acquire all the company stock. “That’s not exactly an offer,” said Lewis.

That letter is something “which we would call, in the industry, a ‘bear hug,’” said Lewis. It is a public expression of a willingness to engage in a transaction, “not an offer.” Bear hugs like this are typically intended to provide some pressure or get some publicity, he said. “Presumably, there is an intention here to see if he can open a discussion.”

Lewis said Biglari could try to negotiate with the board and management of Fremont Michigan InsuraCorp, if he’s still interested. Lewis said the fact that the board did not elect to pursue Biglari’s proposal “doesn’t necessarily mean that they wouldn’t, at a higher price.”

As for defending against a true hostile takeover attempt: The Fremont company “does appear to have a shareholder rights plan — what people commonly refer to as a poison pill,” said Lewis.

“Poison pills” are complicated legal devices designed to discourage hostile takeovers, in which a company tries to make its stock less attractive to a potential buyer.

Although he is not privy to any details of the shareholder rights plan InsuraCorp appears to have, Lewis said he is sure it “would be a difficult hurdle for Mr. Biglari to overcome.”

Lewis said the legislation in the House now is “unusually specific.”

“This does seem to be tailored specifically for the Fremont situation,” he added.

Two West Michigan senators, Republicans Mark Jansen and Bill Hardiman, both voted against it.

Hardiman said that, in some ways, his no-vote was a “difficult” decision. However, he said, “it just didn’t seem (the proposed legislation) was consistent with free market principles.”

“I certainly appreciate the fact that Fremont Insurance has been there a long, long time and providing great jobs, and I hope that continues. But I just didn’t think it was right for the state government to step in at that point in time and change the rules of the game.”

Sustainable recognition

The city of Grand Rapids is in the running to be named the most sustainable city of its size in a contest sponsored by the U.S. Chamber of Commerce and Siemens Corp. GR is vying for that honor with Davenport, Iowa, and Hoover, Ala., as a finalist in the mid-size community category.

“These communities have shown that, even in tough economic times, they can remain focused on ensuring a strong and sustainable future,” said Jim Whaley, vice president of corporate communications and marketing for Siemens.

“All of the finalists for the awards made important contributions to their hometowns this year,” added Stephen Jordan, senior vice president for the chamber’s Business Civic Leadership Center.

The winners will be announced at the BCLC’s National Conference on Corporate Community Investment in Houston May 13.

A week to eat (well)

The dates for the city’s very first Restaurant Week are set and so is the very special price for a three-course dining experience.

The inaugural Grand Rapids Restaurant Week will actually run for 10 days — from Nov. 4-13 — and a mere $20.10 will buy an exclusive three-course meal at any of the participating restaurants. The underlying idea is to increase traffic to local restaurants and raise a positive buzz about how good the food is.

“Having experienced the creation of Restaurant Week in Denver while I was the senior vice president of Denver’s Convention and Visitors Bureau, I saw the amazing turnout for Restaurant Week. Participating restaurants and restaurant goers both benefitted from the experience, and every year the event has grown stronger,” said Doug Small, president of the Convention and Visitors Bureau, the brainchild behind the local event.

“We found that once people were introduced to a restaurant for the first time, they were much more likely to return to it after having a positive experience. We need to put a focus nationally on the fact that this community has the destination appeal that you can’t find in other cities, and I think a Restaurant Week is a great way to do that.”

Sally Littlefair Zarafonetis is managing the project for the CVB. She hopes to sign up 60 restaurants for the inaugural dine-out. A Web site will be created for the event, and diners will be able to make reservations online. The Downtown Development Authority gave the CVB $25,000 in seed money to get the thing up and running.

The event has a nice extra dividend going for it. Restaurants will donate $1 of every special meal sold toward a scholarship fund for GRCC’s Secchia Institute for Culinary Education. “When we learned that the Secchia Institute for Culinary Education would be the recipient of donations … we were surprised and delighted,” said the institute’s Randy Sahajdack.

The institute, of course, is named after a former restaurant guy and noted food connoisseur, Peter Secchia. Maybe Peter would like to leave a tip, like matching the donations made to the institute.

WMEAC cites award winners

The West Michigan Environmental Action Council honored three local organizations Friday with its Second Annual Triple Top Line Awards as part of the annual EcoAction Expo and Concert at Fountain Street Church. First introduced as part of WMEAC’s 40th anniversary celebration, the TTL Awards honor projects, programs and concepts emerging from the West Michigan community that have or will soon contribute to the region’s rich tapestry of sustainable progress.

Winners included:

Sustainable Business Leadership: Clothing Matters, a Grand Rapids retailer established in 1996 that hopes to make West Michigan become the most sustainably dressed region in the nation. Community-Based Achievements Toward Sustainability: Friends of Grand Rapids Parks, an independent, citizen-led, nonprofit founded last year to protect, enhance and expand parks and public spaces in the city.

Governments Implementing Sustainable Change: Lower Grand River Organization of Watersheds, established last year by the Grand Valley Metropolitan Council to oversee restoration, protection and enhancement activities in the Lower Grand River drainage basin that encompasses more than 3,000 square miles starting at the confluence of the Grand and Looking Glass Rivers in downtown Portland in Ionia County through metro Grand Rapids to Lake Michigan.

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